The present invention relates to a check negotiation system using a check card which is provided with a magnetic stripe to store prescribed data and to an apparatus for drawing a check card.
In commercial transactions, settlement is conventionally made by cash or by checks drawn on a current account in a bank, etc. Users of such checking system enjoy its advantages. From the standpoint of banking business, however, such system involves a vast amount of complicated clerical procedures, and a number of negotiation checks pose a bottleneck in rationalizing the banking business.
We will now briefly refer to the procedure for handling checks at a bank, etc. A user such as a firm or an entrepreneur opens a current account with a bank based on which the bank issues a check book containing a number of checks printed with the user's account number (including the bank and branch codes) by means of, for example, magnetic ink character recognition (MICR). The user draws a check by writing a sum of money by hand or by a check-writer. The recipient then submits the check to a clerk at his/her bank to be deposited in his account. The bank first records all such checks on a microfilm and then print thereon the respective amount using an MICR encoder. The checks then are sorted out into their own checks and other bank checks. Those checks issued by other banks are stamped for clearing and are brought to a regional clearing house to which the bank (or branch) belongs. Checks from different banks collected at the clearing house are sorted out according to banks by means of an MICR reader/sorter, and a balance sheet of different banks is also made. Each bank takes back its checks and confirms the balance of the drawer's account. This is done within a predetermined period of time (i.e., one day after clearing). For the cases with insufficient fund in the account during this period, the bank which received such checks is notified of the conditions so that the amount thereof is credited to the bearer's account. Upon expiration of such period, the drawn amount is automatically credited to the bearer's account in other cases and the bank concerned settles payment according to the balance sheet mentioned above. As for the own checks issued by themselves, the fund of the drawer's account is confirmed by means of an on-line system and if sufficient, the check is honored and credited to the bearer's account.
As mentioned above, conventional check negotiation system involves complicated and multiple procedure of both manual and mechanical steps. There is also a risk of illicit use if the check book mentioned above is lost or stolen and the loss or theft thereof is not reported to the bank immediately.